India Test-Starts Kudankulam Nuclear Reactor Amid Protests

Oct. 22 (Bloomberg) -- Nuclear Power Corp. of India Ltd.,
the nation’s sole atomic energy producer, test-started part of a
$2.84 billion reactor today after a delay of six years amid
protests from local residents.

The first unit of the Kudankulam plant in the southern
state of Tamil Nadu was operated for two hours at a capacity of
175 megawatts, station director Hari Narayan Sahu said by phone.
The unit should run at half its capacity by Oct. 26 and reach
its maximum output of 1,000 megawatts in six weeks, while the
second unit should start in a year, he said.

Public rallies against Kudankulam, the first two units of
which are not covered by any liability law, increased after the
meltdown of Japan’s Fukushima nuclear plant March 2011, the
worst civil atomic accident since Chernobyl in 1986. Concerns
over the extent of liability equipment suppliers will have to
bear in case of an accident is stalling India’s deals with Areva
SA, General Electric Co. and Westinghouse Electric Co., impeding
Prime Minister Manmohan Singh’s goal to boost the nation’s
nuclear generation capacity 13 times by 2032.

“Nuclear energy is an option India can’t ignore,” said
Debasish Mishra, head of energy practice at Deloitte Touche
Tohmatsu India Pvt. in Mumbai. “If we are able to spread out
the capital cost over a long period, we can get extremely
competitive power tariffs from nuclear plants.”

The cost of generating power from the first unit will be
2.6 rupees to 2.7 rupees, Sahu said.

Singh, Putin

Singh met Russian President Vladimir Putin yesterday to
discuss cooperation between the two countries on energy and
strategic matters. An accord for buying two more reactors for
Kudankulam from Russia has been delayed because of Russia’s
concern about India’s liability law.

The law sets a 15 billion rupee ($243 million) cap on
payouts by Nuclear Power Corp., with the government responsible
for damages beyond that. After paying compensation, Nuclear
Power Corp. can seek money from suppliers for defective
equipment or materials.

The combined cost of the two existing units of 1,000
megawatts each has risen to 175 billion rupees, Sahu said, from
about 132 billion rupees. The Kudankulam reactor is the result
of a bilateral agreement between India and Russia signed before
the Civil Liability for Nuclear Damages Act became a law in 2010
to make atomic plant suppliers and builders liable in the event
of nuclear accidents.